Women Equity Partners launches debut fund

The fund will target a final close by the end of 2020 on €150m.

The firm was founded by president Dunya Bouhacene and Grégoire Revenu, with the aim of supporting the growth of female-led SMEs in France. Bouhacene co-founded Women Equity Partners after having held a number of executive positions in the private and public sectors, as project manager, CFO and consultant. Partner Sophie Nordmann joined the firm in 2019 and was previously an investment director at Crédit Mutuel Equity, but spent the majority of her career as an investment director at Andera Partners.

Both Bouhacene and Nordmann noted the underrepresentation of female-led companies in private equity portfolios. Nordmann explained the data-backed approach behind the firm's investment strategy: "We've assembled a database of around 40,000 SMEs led by both men and women in the €4-150m revenue range. We've been gathering and analysing this data every year for the past 10 years; that provides us with an unparalleled understanding of the profiles of female-led companies and of their development dynamics."

Nordmann highlighted some of the key findings from the data: "First of all, women-led companies form 15-20% of SMEs in France, which is roughly around 20,000 companies. Secondly, in terms of size, they are very similar to their male-led counterparts. The third element, which is more surprising, is the sectors: there is very little discrepancy between sector distribution of men- and women-led SMEs. That goes against usual assumptions, based on the concentration of female workforce in very few sectors. Finally, the universe of women-led SMEs is consistently outperforming its male counterpart in terms of profitability. From all those elements, we considered that there is nothing more comparable to a male-led SME than a female-led one, except their financial performance."

Investors
Having been on the road since January 2020, Bouhacene and Nordmann told Unquote that the fund has drawn interest from French banks, insurance companies, pension funds and funds-of-funds, as well as non-domestic funds-of-funds.

The firm has had its first oral commitments for a little more than 20% of the first close, Bouhacene and Nordmann told Unquote. The fund expects minimum commitments from institutional investors of €2m.

Investments
The profitability of women-led companies was key to the firm's decision to target them, according to Nordmann: "When it comes to profitability, we have cut this dimension in every possible way to manage the results – women-led companies count for 21% of all operating profits but 15% of total companies in our last survey. When we look across sectors and revenue classes, we find this overperformance every time, in each cluster."

The fund will have a flexible investment strategy, according to Bouhacene and Nordmann, investing for majority and minority stakes, targeting female-led SMEs (defined as companies with revenues of €4-150m) in France.

The vehicle will invest in 10-14 companies with an enterprise value of €20-200m and with EBITDA of more than €2m. The fund will deploy equity tickets of €7-20m.

Female-led businesses are at the heart of the investment strategy, Bouhacene told Unquote. Asked about the firm's definition of "female-led", she said: "Our first obvious focus is that the person who is behind the development and growth, and has the legal and operational means to decide on the next step for the company, is female. But we would also consider very gender-diverse teams if we believe a company is showing a great ability in attracting and maintaining talent in a challenging industry. So, it's women-led or co-led."

Nordmann explained the fund's geographic focus: "For our first fund, we will mainly consider companies based in France. Neighbouring countries such as Switzerland, Belgium and Spain could be an option, but would be exceptional – we have a strong relationship with hundreds of female managers in France, our dealflow is already well-entrenched. For the second fund, we hope to deploy the same strategy outside France and in Europe."

Bouhacene highlighted the strong untapped profile of women leading businesses in the sector: "There is a gap that we can see, also when it comes to research, in the profile of the women in SMEs. The circumstances that mean that women are less numerous than their male competitors in SMEs are the same reasons that explain their overperformance: it is women with a specific profile who have managed to evolve under heavy constraints and do better in areas where they are not expected to."

Nordmann added: "We want to deal with market inefficiencies that lead to great opportunities."

People
Women Equity Partners – Dunya Bouhacene (president); Sophie Nordmann (partner).

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